PricewaterhouseCoopers plans to acquire Diamond Management & Technology Consultants for $378 million.
PwC said Tuesday it would acquire all of the outstanding common shares of Diamond for $12.50 per share in cash, a premium of 31 percent to Diamonds closing stock price of $9.54 on August 23. Shares of Diamond rose $3.00 on Tuesday to close at $12.54. Diamond will join PwCs Advisory practice, one of the largest consulting service providers in the world.
PwC sold its technology consulting practice to IBM in 2002 for $3.5 billion at a time when many large accounting firms were spinning off or selling their consulting units in the wake of Sarbanes-Oxley and the Enron and WorldCom accounting scandals. But the firm has been steadily rebuilding its technology and management consulting services in recent years within its Advisory practice.
The firm acquired BearingPoints North American Commercial Services Business last year for $44 million (BearingPoint was formerly KPMGs consulting unit), and PwC has also acquired smaller consultancies recently in areas such as identity management.
We are pleased to bring to PwC a group of highly talented professionals with a proven track record of consistently delivering world class service, said PwC U.S. Chairman and senior partner Robert Moritz in a statement. "The acquisition reflects our long-standing commitment to provide the expertise and experience necessary to assist our clients in addressing their highest priority issues."
"This is an attractive all-cash opportunity for our stockholders, creates exciting prospects for our people, and will provide us new and enhanced capabilities to bring to our clients as we help to address their most critical challenges and important opportunities, said Diamond president and CEO Adam Gutstein. Theres a clear strategic fit between PwC's assets and aspirations and Diamond's positioning. We have complementary cultures and very similar values, driven by a shared commitment to the highest levels of client service, objectivity, innovation, and impact.
Diamond provides strategic management consulting services to help companies grow, improve margins, and increase the productivity of their investments. Diamond employs more than 500 consultants worldwide and has offices in Chicago, Hartford, New York, Washington D.C., London, and Mumbai.
The transaction, which has been unanimously approved by both companies' boards, is expected to close in the fourth quarter of calendar year 2010, subject to customary closing conditions, including the approval of Diamond's stockholders and antitrust clearance. PricewaterhouseCoopers LLP was advised on the deal by Perella Weinberg Partners LP and Davis Polk & Wardwell LLP. Diamond was advised by Morgan Stanley & Co. Incorporated and Winston & Strawn LLP.
